LONG ISLAND RAIL ROAD COMPANY v. PUBLIC SERVICE COMMISSION STATE NEW YORK ET AL. (07/22/68)

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, SECOND DEPARTMENT
1968.NY.42724 <http://www.versuslaw.com>; 292 N.Y.S.2d 167; 30 A.D.2d 409
July 22, 1968
LONG ISLAND RAIL ROAD COMPANY, APPELLANT,v.PUBLIC SERVICE COMMISSION OF THE STATE OF NEW YORK ET AL., RESPONDENTS. METROPOLITAN COMMUTER TRANSPORTATION AUTHORITY, INTERVENOR-APPELLANT
Appeal, pursuant to section 91 of the Railroad Law, from a decision and order of the Public Service Commission made on April 4, 1967.
Sullivan & Cromwell and George S. Onken (Robert MacCrate, Robert R. Prince, Richard H. Stokes and John L. Warden of counsel), for appellants.
Kent H. Brown (Vincent P. Furlong and Martin L. Barr of counsel), for Public Service Commission, respondent.
Charles Metz, Village Attorney, for Village of Rockville Centre, respondent.
Benjamin, J. Brennan, Acting P. J., Rabin, Hopkins and Munder, JJ., concur.
Author: Benjamin

Appeal, pursuant to section 91 of the Railroad Law, from a decision and order of the Public Service Commission made on April 4, 1967.

This is an appeal by the Long Island Rail Road Company (hereinafter called LIRR) from a decision and order of the Public Service Commission (hereinafter called PSC). We granted leave to the Metropolitan Commuter Transportation Authority (hereinafter called MTA) to intervene as a party appellant; and MTA has joined in the appeal of LIRR. The appeal is pursuant to section 91 of the Railroad Law, which authorizes an aggrieved party to appeal directly to the Appellate Division from a decision of PSC relating to a railroad grade crossing. The decision and order herein involved were made in a proceeding brought by the Village of Rockville Centre, under sections 90 and 94 of the Railroad Law, for approval by PSC of the construction of a pedestrian underpass beneath the elevated tracks of LIRR and for a direction by PSC that LIRR or MTA should bear half the cost thereof. The PSC decision held that LIRR, a wholly-owned subsidiary of MTA, is subject to the provisions of sections 90 and 94 of the Railroad Law, which inter alia provide (a) that, before a road is built across an existing railroad line, PSC must approve the manner of the road's construction and (b) that the cost of such construction shall be borne in equal shares by the railroad and the appropriate municipality. The PSC order directed the general manner of construction of the pedestrian underpass; directed LIRR to submit detailed plans of the work and a cost estimate to PSC for its approval; and directed LIRR to abey commencement of the work until such approval shall have granted. The sole issue raised by appellants is whether PSC has jurisdiction over MTA and its subsidiaries and, consequently, whether it had jurisdiction to make the subject decision and order. In our opinion it did not.

The issue turns upon the construction of subdivision 8 of section 1266 of title 11 of the Public Authorities Law (title 11 is the Metropolitan Transportation Authority Act, hereinafter called the MTA Act) which both sides insist is plain and unambiguous but which each reads as saying the opposite of what the other says. In relevant part, that section reads as follows:

"The authority may do all things it deems necessary, convenient or desirable to manage, control and direct the maintenance and operation of transportation facilities, equipment or real property operated by or under contract, lease or other arrangement with the authority. Except as hereinafter specially provided, no municipality or political subdivision * * * shall have jurisdiction over any facilities of the authority or any of its activities or operations. The local laws * * * of a municipality or political subdivision * * * conflicting with this title or any rule or regulation of the authority, shall not be applicable to the activities or operations * * * or the facilities of the authority * * *.

" The jurisdiction, supervision, powers and duties of the public service commission or of the department of public service of the state under the public service law shall not extend to the authority in the exercise of any of its powers under this title. The authority may agree with the state department of public works for the execution by such department of any grade crossing elimination project or any grade crossing separation reconstruction project along any railroad facility operated by the authority or by one of its subsidiary corporations * * *. Any such project shall be executed as provided in the grade crossing elimination act and the railroad law, respectively, and the costs of any such project shall be borne as provided in such laws, except that the authority's share of such costs shall be borne by the state" (emphasis supplied).

The critical words in the quoted statute are the emphasized words "under the public service law", since PSC contends that they limit MTA's exemption from PSC supervision to only those matters spelled out in the Public Service Law. It urges that the section is clear on its face and does not require construction; that its plain meaning is that PSC still has supervisory powers over MTA with respect to matters dealt with in the Railroad Law; and that a contrary construction (i.e., that PSC has no supervisory powers over MTA under the Railroad Law) would lead to chaos because it would leave wholly unregulated all railroads operated by MTA and its subsidiaries in the metropolitan area.

MTA, on the other hand, contends that the section clearly exempts it from all supervision by PSC because the sole basic grant of supervisory powers to PSC over railroads is in the Public Service Law, and the exemption of MTA from PSC supervision "under the public service law" consequently is all-inclusive despite the quoted words; that, while the Public Service Law and Railroad Law give PSC jurisdiction over "railroad corporations", MTA and its subsidiaries are not within that category; and that PSC jurisdiction over MTA would be incompatible with the Legislature's sweeping delegation of responsibility to MTA for a vital public function.

We believe that MTA's contentions are sound and that MTA is completely exempt from supervision by PSC.

As the issue is novel, we can look for guidance only to the statutes themselves, their history and purpose, and a few tangential court holdings.

It should be noted at the outset that subdivision 5 of section 1266 of the MTA Act gives all MTA subsidiaries the same privileges, immunities and exemptions as MTA itself has. Hence, if MTA is exempt from PSC supervision, its subsidiary, LIRR, would likewise be exempt. New York State's regulation of railroads started in 1848, when certain minimum safety and financial standards for railroad corporations were enacted into law. By 1882 there had been established a Board of Railroad Commissioners with powers of investigation. In 1890 the first Railroad Law was enacted. In 1907 the Public Service Commissions Law abolished the Board of Railroad Commissioners and transferred the latter's functions to the Public Service Commissions; and it gave the Public Service Commissions greatly expanded regulatory powers over rates and other matters. At the same time the existing Railroad Law was continued in effect. In 1910 the old Public Service Commissions Law and Railroad Law were repealed, the present Public Service Law and Railroad Law were enacted in their place, and the new laws were expanded and harmonized so that, when read together, they created a unified system of railroad legislation (see People ex rel. Ulster & Delaware R. R. Co. v. Public Serv. Comm., 171 App. Div. 607, 609, affd. 218 N. Y. 643).

The Public Service Law, as enacted in 1910 and as it still reads, contains two sections which establish PSC's basic jurisdiction over railroads. Section 5 provides that PSC's "jurisdiction, supervision, powers and duties * * * shall extend * * *

"1. To * * * railroads * * * and to the persons or corporations owning, leasing or operating the same".

Section 150 states that the Board of Railroad Commissioners was abolished in 1907 and provides: "All the powers and duties of such board conferred and imposed by any statute of this state shall hereafter be ...

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